Google To Be Penalized Under EU antitrust act

Alphabet stock, EU antitrust, market dominance, undue advantage

The internet search engine giant has been under the axe of EU antitrust act

Sources familiar with the matter has disclosed that Alphabet Inc.’s subsidiary Google is likely to be penalized under the European Union antitrust sanction in the current year. The sources further expressed that the settlement of the test case with the bloc’s regulator is highly unlikely.

There are several incentives which either party can opt for reaching a deal in a six-year dispute. This could help establish a precedent for the Internet search giant’s searches for flights, hotels, and other services in addition to testing the ability of the regulators to safeguard Web diversity.

This was the second time that Google had been hit by EU antitrust charge. The company has been alleged for taking undue advantage of its strong dominance in the market and deliberately squeezing out the rivals. After years of arguing and fighting, the company shows little signs of backing down. Since 2010, the company had had three failed compromise attempts therefore, by the looks of it, the Internet search giant is not looking forward to settle the allegations put on it which blame the company for using its Web search results to accentuate its own shopping service unless the Commission takes its stance back.

Such turn of events is highly unlikely as Margrethe Vestager –European Competition Commissioner –shows no interest in going for a settlement when there is no discovery of any sort of wrongdoing or a fine against Google, sources privy to the matter cited.

The stakes are high for the Alphabet’s subsidiary which has constantly denied of any sort of breach. According to some of the rivals, any fine basically highlights the cost of doing the business and through its existing business model it has a lot to gain in profit.

The European Commission didn’t comment.

Thomas Vinje, a lawyer who has advised few of Google’s competitors has cited: “From a pure profitability perspective, it is better off dragging out the competition case, continuing its practices for as long as possible, and ultimately paying a fine that will be smaller than the profits it generates by continuing the conduct.”

On the contrary, according to several sources, the last week’s pact with the rival Microsoft indicates that since companies are trying to surrender all complaints against each other therefore Google is likely to go for a deal with the European Commission.

However, one of the sources cited that it is too early for the Alphabet’s subsidiary to come up with any decision regarding the EU case. Up till now, Google’s track record regarding the global cases has been mixed –winning some legal battles while losing the others.

In the near future, more details of the case will be unfolded. Alphabets Inc.’s shares have been flat meaning that the news didn’t affect them negatively whatsoever. At the market which closed on Friday, Alphabet Inc.’s stock stood at a price of $707.88. The 52 week range of the stock is $532 to $810.